PSA chief says not focused on new partnership with Fiat Chrysler (updated)

Peugeot Invest SA

03/04/2019 15:21

(Adds background and details on China, India)
    By Sanjana  Shivdas
    CHENNAI, April 3 (Reuters) - French carmaker PSA Group
 PEUP.PA  is not focused on negotiating a new partnership with
Fiat Chrysler  FCAU.N   FCHA.MI , Chief Executive Officer Carlos
Tavares said on Wednesday.
    Asked if an alliance with Fiat was something PSA is actively
exploring or in talks about, Tavares said at a press event in
the southern Indian city of Chennai, "No, we are not targeting a
specific company. We are working with all of our partners."
    Media reported earlier this week that PSA and Fiat Chrysler
were exploring a partnership to share investments to build cars
in Europe.
    The president of the Peugeot family holding company FFP
 FFPP.PA  said last month he would support a new deal and had
suggested Fiat Chrysler was among the options.  urn:newsml:reuters.com:*:nL8N2163NT
    "We have a lot of partnerships and of course it is very
normal that we work with our partners to improve what we are
doing continuously. But we are not targeting any specific car
company for a very simple reason we don't need it."
    "If there is an opportunity, we will consider but we don't
have to target any specific company and specifically not the one
you mentioned," Tavares said, as the company unveiled its
Citroen C5 Aircross SUV for the Indian market.
    FCA is often cited as a possible merger candidate for PSA
given its exposure to the U.S. market and its popular Jeep
brand.
    
    GLOBAL PUSH
    PSA, known for its legacy Peugeot, Citroen and DS brands is
eyeing a global play as it pursues a 50 percent group sales
increase outside its home-turf Europe by 2021.
    To expand internationally, PSA is relying on an Opel
re-launch in Russia, a Peugeot comeback in the U.S. market and a
second entry in India.
    At Wednesday's event, PSA said the Citroen C5 Aircross SUV
would go on sale in India before the end of 2020, adding it was
aiming to capture 2 percent of market share in the country of
1.3 billion by 2023-24.
    The company is also planning to make India an export hub,
starting with automobile parts.
    The SUV is the first product from the Citroen brand aimed at
the Indian market and the company said it would launch one new
car in the market every year from 2021.
    PSA is re-entering the India market. In the late 1990s, its
local joint venture to sell Peugeot cars fell apart.
    Almost all of PSA's revenue comes from Europe, which
accounts for 80 percent of its global vehicle sales after its
purchase of General Motors'  GM.N  Opel-Vauxhall division in
2017.
    In China, which contributes about 4 percent of Paris-based
PSA's sales, the carmaker has been struggling to reverse a
sustained sales collapse where group deliveries fell 32 percent
in 2018. (https://reut.rs/2OGQVv4)
    "We are not giving up in China. There is no way we will ever
give up in China... It will take time but we will not give up,"
said Tavares.
    India is the world's fastest-growing major car market but in
the last few months weak consumer sentiment has led to lower
sales, with rising insurance costs also hitting sales.
    The country's top three automakers, Maruti Suzuki India Ltd
 MRTI.NS , Hyundai Motor India Ltd and Mahindra and Mahindra Ltd
 MAHM.NS , together account for about 74 percent of domestic
sales in India.

 (Reporting by Sanjana Shivdas in Chennai and Rachit Vats in
Bengaluru; Editing by Sweta Singh, Bernard Orr)
 ((sweta.singh@thomsonreuters.com; within U.S. +1 646 223 8780,
outside U.S +91 80 6749 6125; Reuters Messaging: Reuters
Messaging: sweta.singh.thomsonreuters.com@reuters.net))